XN000022-1979-09-14 — Page 4

FRIDAY, SEPTEMBER 14, 1979

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ON THE FASTER INCREASE IN PRICES, MR. HADDON-CAVE EXPLAINED, HOWEVER, THAT THIS IS NOT ENTIRELY DUE TO THE PRESSURE OF DEMAND INASHUCH AS WORLD PRICES OF FOODSTUFFS AND RAW MATERIALS ARE NOW FORECAST TO INCREASE BY 15 PER CENT, COMPARED WITH A FORECAST OF SEVEN PER CENT MADE AT THE BEGINNING OF THIS YEAR+.

IN AN ANALYSIS OF RECENT TRENDS IN THE GROWTH RATES OF THE MONEY SUPPLY AND CREDIT, MR. HADDON-CAVE SAID THAT THEY MUST BE LOOKED AT IN THE CONTEXT OF THE REVISED FORECAST OF THE ECONOMY'S PERFORMANCE THIS YEAR.

HE SAID THAT THE REVISED FORECAST OF THE GROWTH RATE OF GDP AT CURRENT PRICES IS 27 PER CENT, WHILST THE ANNUALISED GROWTH RATE OF THE MONEY SUPPLY (M2) ON THE BASIS OF THE SEVEN MONTHS ENDING JULY 31 IS 22 PER CENT+. HE ADDED THAT THIS IS THE REVERSE OF THE SITUATION IN 1978 WHEN THE GROWTH RATE OF M2 AT 26 PER CENT WAS OUT OF LINE WITH THE GROWTH RATE OF GDP AT CURRENT PRICES AT 16 PER CENT.

MR. HADDON-CAVE CONCLUDED HIS SPEECH BY CLAIMING THAT +TO THE EXTENT THAT BUDGETARY POLICY THIS YEAR HAS INVOLVED INTERVENTIONISM, IT HAS PROVED TO BE AS INTENDED, COMPATIBLE WITH THE ADJUSTMENT PROCESS+.

HE NOTED THAT INTEREST RATES HAD BEEN SUCCESSFUL IN ASSISTING THE EXCHANGE RATE IN THE ADJUSTMENT PROCESS. HE DID NOT THINK THAT, IN PRESENT CIRCUMSTANCES, +A RETURN TO A FIXED EXCHANGE RATE REGIME WAS DESIRABLE, AS SOME CRITICS HAVE RECENTLY SUGGESTED, TECHNICAL DIFFICULTIES NOTWITHSTANDING.+ HE SAID HE WOULD RATHER HAVE THE EXCHANGE RATE FLOATING, BECAUSE THIS MEANS THAT +WE HAVE AN ADDITIONAL DEGREE OF FREEDOM AS FAR AS MACRO-ECONOMIC MANAGEMENT IS CONCERNED+.

LANTAU BOOMING AS A RESORT AREA *****

THE ACTING SECRETARY FOR THE NEW TERRITORIES, MR. JOHN TODD TODAY (FRIDAY) PAINTED A PROMISING PICTURE ON LANTAU ISLAND AS A RESORT AREA WITH SEVERAL MULTI-MILLION-DOLLAR HOLIDAY HOME PROJECTS.

THESE VERY VALUABLE PROJECTS, HE SAID, WERE VERY GOOD NEWS FOR HONG KONG IN TERMS OF THE CONFIDENCE IT SHOWS IN THE FUTURE.

THEY ALSO REFLECTED THE PLANNING AND CO-OPERATION BETWEEN THE GOVERNMENT AND PRIVATE ENTERPRISE IN FULFILLING VERY LONG STANDING NEEDS IN RECREATIONAL OUTLETS AND A VERY DIFFERENT RESIDENTIAL LIFE-STYLE AWAY FROM CONCRETE TOWERS, HE ADDED.

MR. TODD MADE THESE REMARKS WHEN HE OFFICIALLY OPENED THE FIRST STAGE OF THE HOLIDAY RESORTS' SEA RANCH AT YI LONG WAN ON THE ISLAND.

THE SEA RANCH IS A $70 MILLION HOTEL PROJECT UNDERTAKEN BY THE HUTCHISON GROUP AND IS THE FIRST OF A NUMBER OF SIMILAR PROJECTS WHICH THE GOVERNMENT HAS WELCOMED AND ENCOURAGED.

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